Subjects · Leaving Cert Economics
Leaving Cert Economics: The labour market
How often The labour market comes up on the Economics papers, every year it was asked, and questions to try.
HL Asked on 5 of the last 5 Higher Level papers, most recently in 2025. banker
OL Asked on 5 of the last 5 Ordinary Level papers, most recently in 2025. banker
Quick ones on The labour market.
- Depends only on the wage rate that is offered
- Depends on demand for the goods workers produce
- Is set by the government for each industry
- €3.33
- €26
- €120
- Diminishing returns lower each extra worker's MRP
- Workers prefer leisure at high wages, so fewer are hired
- Wages always fall over time as more people work
Show the answers
(a) Depends on demand for the goods workers produce
(b) €120
(c) Diminishing returns lower each extra worker's MRP
Higher Level
Asked on 5 of the last 5 Higher Level papers, most recently in 2025. banker
Every paper, year by year
| Year | Where it came up |
|---|---|
| 2025 | Q6, Q14 |
| 2024 | Q4 |
| 2023 | Q11 |
| 2022 | Q14 |
| 2021 | Q16 |
Links open the State Examinations Commission’s paper for that year.
More The labour market questions
The labour market, 2 marks
Which is a recognised cause of the gender pay gap?
- Higher income tax rates for women
- Laws requiring lower pay for women
- More women in lower-paid sectors and roles
Show the answer
More women in lower-paid sectors and roles
Occupational segregation, career breaks for caring and fewer women in senior roles widen the average gap. Equal pay for equal work is already required by law.
The labour market, 3 marks
Demand for software engineers rises. Why do their wages rise sharply in the short run?
- Engineers' MRP falls
- Supply of skilled engineers is inelastic for now
- Demand for labour is not a derived demand
Show the answer
Supply of skilled engineers is inelastic for now
Training takes years, so the number of qualified engineers can't rise quickly. With inelastic supply, extra demand pushes up wages more than employment.
The labour market, 2 marks
In a free labour market, the equilibrium wage is set where…
- The demand for labour equals the supply of labour
- Marginal revenue product is equal to zero
- The Government sets the minimum wage for each industry
Show the answer
The demand for labour equals the supply of labour
Like any market, wages settle where the quantity of labour firms want (based on MRP) matches the quantity workers offer.
Ordinary Level
Asked on 5 of the last 5 Ordinary Level papers, most recently in 2025. banker
Every paper, year by year
| Year | Where it came up |
|---|---|
| 2025 | Q13 |
| 2024 | Q12 |
| 2023 | Q3 |
| 2022 | Q5 |
| 2021 | Q10 |
Links open the State Examinations Commission’s paper for that year.
More The labour market questions
The labour market, 3 marks
The demand for labour is a derived demand. This means?
- Wages for every job are set by the government
- Workers choose how many hours they want to work
- Workers are wanted for the goods they help make
Show the answer
Workers are wanted for the goods they help make
Firms do not hire workers for their own sake. They hire because consumers want the goods and services those workers make. If demand for the product falls, so does demand for labour.
The labour market, 3 marks
The demand curve for labour slopes downwards because of?
- Falling prices of machinery
- Diminishing returns to labour
- Rising minimum wages
Show the answer
Diminishing returns to labour
Each extra worker eventually adds less output than the one before, so is worth less to the firm. Firms will only hire more workers if the wage falls.
The labour market, 3 marks
A minimum wage set above the equilibrium wage may cause?
- Some unemployment
- A shortage of workers
- A fall in wages
Show the answer
Some unemployment
At a wage above equilibrium, more people want to work but firms want to hire fewer. The gap between the labour supplied and the labour demanded is unemployment.
Other Economics topics
- Budget, fiscal policy & debt
- Business cycles & economic aims
- Circular flow & multiplier
- Cost-benefit analysis
- Demand, supply & equilibrium
- Elasticity of demand
- Factors of production
- Government intervention in markets
- Inflation & the CPI
- Market failure & externalities
- Monopoly & price discrimination
- Sustainable development
- Taxation
- Trade & comparative advantage
- Competition policy & HHI
- Competitiveness & exchange rates
- Consumer behaviour & utility
- Costs, revenue & profit
- Globalisation, MNCs & FDI
- Growth, development & aid
- Inequality & poverty
- Labour force & unemployment
- Monetary policy & the ECB
- National income measures
- Scarcity & opportunity cost
- The EU & global institutions
- Balance of payments
- Banking & the Central Bank
- Economic thinking & data
- The hidden economy
- Economies & diseconomies of scale
- Monopolistic competition
- Oligopoly
- Perfect competition